'''Republic of Finland''' (''Suomi'' or ''Suomen tasavalta'' in Finnish, ''Republiken Finland'' in Swedish) is a country of northern [[Europe]] known for its largely [[social democracy|social democratic]] economic system. The Finnish [[conservative]] party, the [[National Coalition]] led by [[Jyrki Katainen]], is its principal conservative organization.

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The state capital is [[Helsinki]] and the principal exports are machines, electronics (for example cellphones) and forestry products. [[Finnish]] is the principal language spoken, a [[Finno-Ugric]] language. Like many nations that do international business, or have a strong tourist trade, many Finns speak English to facilitate communication with other countries. The second official language is Swedish, which has the same status as Finnish in the country. Finland is known as "the land of lakes".

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==Geography==

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[[File:Mantyluoto, Pori, Finland..jpg|thumb|left|Mäntyluoto, Pori.]]

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The area of Finland is approximately 338 000 square kilometers, with a north-south axis of 890 kilometers. Most of the landscape is covered with lakes and forests. Finland is often called the "Land of Thousands of Lakes", which is true, because the number of lakes in the country exceeds 188 000, of which about 56 000 have an area of one hectare or more. In the sea there are more than 3 000 islands. Cultivated land and habitation only account for 17% of the land area, rest being mainly [[Norway spruce]] forests.

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Finland is bound by [[Sweden]] in the Northwest, [[Norway]] in the North, [[Russia]] in the East, the [[Gulf of Finland]] in the South and the [[Gulf of Bothnia]] in the West.

*Work force (2.65 million; of which 2.44 million are employed): Public services--32.8%; industry--19%; commerce--15.6%; finance, insurance, and business services--13.8%; agriculture and forestry--4.7%; transport and communications--7.4%; construction--6.7%.

Finnish people (Finns) are known for their love of nature. Nature is prominent in the works of Finnish artists, such as [[Jean Sibelius]], [[Aki Kaurismäki]], [[Alvar Aalto]].

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The great masters of Finnish literature include [[Mika Waltari]], [[Väinö Linna]], [[Johan Ludvig Runeberg]]. Finland is a bi-lingual country and has produced its literary heritage in both Finnish and Swedish. The beloved Moomintrolls were created by the writer and graphic artist Tove Jansson.

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Another important facet of traditional Finnish culture is the love of the Finnish [[sauna]].

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Northern Finland is home to a culture called the [[Sami people]], or [[Laplanders]], which are known for wearing red clothing and herding reindeer. Santa Claus is based on this culture.

Finland currently numbers 5,302,778 inhabitants and has an average population density of 17 inhabitants per square kilometer. This makes it, after Norway and Iceland, the most sparsely populated country in Europe. Finland's population has always been concentrated in the southern parts of the country, a phenomenon even more pronounced after 20th century urbanization.

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The share of foreign citizens in Finland is 2.5 percent being among the lowest of the European Union countries. Most of them are from Russia, Estonia and Sweden.

Most Finns are members of the Evangelical Lutheran Church of Finland (81.7 percent). With approximately 4.6 million members, the Evangelical Lutheran Church of Finland is one of the largest Lutheran churches in the world. A minority belong to the Finnish Orthodox Church (1.1 percent; see [[Eastern Orthodox Church]]). Other Protestantism denominations and the Roman Catholic Church in Finland are significant.

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The main Lutheran and Orthodox churches are constitutional national churches of Finland with special roles such as in state ceremonies and schools. A university degree in theology is compulsory for Lutheran priests. Representatives at Lutheran Church assemblies are selected in church elections every four years.

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Even though the membership in main Lutheran church is high, the population is not highly religious. Polls suggest that 28-60% of the population to be either agnostics or atheists. <ref>http://www.adherents.com/largecom/com_atheist.html</ref>

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===Government===

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====President and cabinet====

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Elected for a 6-year term, the president:

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*Handles foreign policy, except for certain international agreements and decisions of peace or war, which must be submitted to parliament, and EU relations, which are handled by the prime minister;

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*Is commander in chief of the armed forces and has wide decree and appointive powers;

*Appoints the prime minister and the rest of the cabinet (Council of State). The Council of State is made up of the prime minister and ministers for the various departments of the central government as well as an ex officio member, the Chancellor of Justice. Ministers are not obliged to be members of the Eduskunta and need not be formally identified with any political party.

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The president may, upon proposal of the prime minister and after having heard the parliamentary groups, order parliament to be dissolved, and a new election held.

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====Parliament====

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Constitutionally, the 200-member, unicameral Eduskunta is the supreme authority in Finland. It may alter the constitution, bring about the resignation of the Council of State, and override presidential vetoes; its acts are not subject to judicial review. Legislation may be initiated by the president, the Council of State, or one of the Eduskunta members.

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The Eduskunta is elected on the basis of proportional representation. All persons 18 or older, except military personnel on active duty and a few high judicial officials, are eligible for election. The regular parliamentary term is 4 years; however, the president may dissolve the Eduskunta and order new elections at the request of the prime minister and after consulting the speaker of parliament.

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====Judicial system====

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The judicial system is divided between courts with regular civil and criminal jurisdiction and special courts, with responsibility for litigation between the public and the administrative organs of the state. Finnish law is codified. Although there is no writ of habeas corpus or bail, the maximum period of pretrial detention has been reduced to 4 days. The Finnish court system consists of local courts, regional appellate courts, a Supreme Court, and a Supreme Administrative Court.

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====Administrative divisions====

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[[File:Gulf of finland.jpg|thumb|Gulf of Finland.]]

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Finland consists of five provinces and the self-ruled province of the Aland Islands. Below the provincial level, the country is divided into cities, townships, and communes administered by municipal and communal councils elected by proportional representation once every 4 years. At the provincial level, the five mainland provinces are administered by provincial boards composed of civil servants, each headed by a governor. The boards are responsible to the Ministry of the Interior and play a supervisory and coordinating role within the provinces.

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The island province of Aland is located near the 60th parallel between Sweden and Finland. It enjoys local autonomy and demilitarized status by virtue of an international convention of 1921, implemented most recently by the Act on Aland Self-Government of 1951. The islands are further distinguished by the fact that they are entirely Swedish-speaking. Government is vested in the provincial council, which consists of 30 delegates elected directly by Aland's citizens.

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====Military====

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Finland's defense forces consist of 35,000 persons in uniform (26,000 army; 5,000 navy; and 4,000 air force). The country's defense budget equals about 1.3% of GDP. There is universal male conscription under which all men serve from six to 12 months. As of 1995, women were permitted to serve as volunteers. A reserve force ensures that Finland can field 490,000 trained military personnel in case of need.

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====Political parties====

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Finland's proportional representation system encourages a multitude of political parties and has resulted in many coalition governments. Political activity by communists was legalized in 1944, and although four major parties have dominated the postwar political arena, none now has a majority position. In elections held in 2007, the Center Party (Keskusta), traditionally representing rural interests, kept its position as the biggest party. The then-opposition Conservative Party, however, came away as the biggest winner, gaining 10 seats and becoming the second-largest political party in the country. The Center then formed a four-party governing coalition with the Conservatives and the Swedish People's Party and the Greens. The Social Democratic Party (SDP) suffered a defeat in these elections and fell to the third position among the big parties. Of the other parties, the True Finns, the Green League, and the Swedish People’s Party were able to gain seats in parliament. The Conservative Party received the portfolios of foreign minister, finance minister, and defense minister, among others, and became an important player after a long interval.

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===Principal Government Officials===

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*President--Sauli Niinistö

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*Prime Minister--Jyrki Katainen

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*Foreign Minister--Alexander Stubb

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*Ambassador to the United States--Pekka Lintu

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*Ambassador to the United Nations--Kirsti Lintonen

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{{Clear}}

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===Foreign Relations===

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Finland's basic foreign policy goal from the end of the Continuation War with the U.S.S.R. in 1944 until 1991 was to avoid great-power conflicts and to build mutual confidence with the Soviet Union. Although the country was culturally, socially, and politically Western, Finns realized they must live in peace with the U.S.S.R. and take no action that might be interpreted as a security threat. The dissolution of the Soviet Union in 1991 opened up dramatic new possibilities for Finland and has resulted in the Finns actively seeking greater participation in Western political and economic structures. Finland joined the European Union in 1995.

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====Previous relations with the Soviet Union, and today with Russia====

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[[File:Uspenski cathedral Helsinki.jpg|thumb|The Uspenski cathedral of Helsinki; with its golden cumpolas and redbrick façade, the cathedral is one of the clearest symbol of the Russian impact on Finnish history.]]

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The principal architect of the post-1944 foreign policy of neutrality was J.K. Paasikivi, who was President from 1946 to 1956. Urho Kekkonen, President from 1956 until 1981, further developed this policy, stressing that Finland should be an active rather than a passive neutral. This policy is now popularly known as the "Paasikivi-Kekkonen Line."

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Finland and the U.S.S.R. signed a peace treaty at Paris in February 1947 limiting the size of Finland's defense forces and providing for the cession to the Soviet Union of the Petsamo area on the Arctic coast, the Karelian Isthmus in southeastern Finland, and other territory along the former eastern border. Another provision, terminated in 1956, leased the Porkkala area near Helsinki to the U.S.S.R. for use as a naval base and gave free access to this area across Finnish territory.

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The 1947 treaty also called for Finland to pay to the Soviet Union reparations of 300 million gold dollars (amounting to an estimated $570 million in 1952, the year the payments ended). Although an ally of the Soviet Union in World War II, the United States was not a signatory to this treaty because it had not been at war with Finland.

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In April 1948, Finland signed an Agreement of Friendship, Cooperation, and Mutual Assistance with the Soviet Union. Under this mutual assistance pact, Finland was obligated--with the aid of the Soviet Union, if necessary--to resist armed attacks by Germany or its allies against Finland or against the U.S.S.R. through Finland. At the same time, the agreement recognized Finland's desire to remain outside great-power conflicts. This agreement was renewed for 20 years in 1955, in 1970, and again in 1983 to the year 2003, although the subsequent dissolution of the Soviet Union led to the agreement's abrogation.

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The Finns responded cautiously in 1990-91 to the decline of Soviet power and the U.S.S.R.'s subsequent dissolution. They unilaterally abrogated restrictions imposed by the 1947 and 1948 treaties, joined in voicing Nordic concern over the coup against Soviet leader Mikhail Gorbachev, and gave increasing unofficial encouragement to Baltic independence.

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At the same time, by replacing the Soviet-Finnish mutual assistance pact with treaties on general cooperation and trade, Finns put themselves on an equal footing while retaining a friendly bilateral relationship. Finland now is boosting cross-border commercial ties and touting its potential as a commercial gateway to Russia. It has reassured Russia that it will not raise claims for Finnish territory seized by the U.S.S.R. and continues to reaffirm the importance of good bilateral relations.

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====Multilateral Relations====

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Finnish foreign policy emphasizes its participation in multilateral organizations. Finland joined the United Nations in 1955 and the EU in 1995. As noted, the country also is a member of the North Atlantic Treaty Organization's (NATO) Partnership for Peace as well as a member in the Euro-Atlantic Partnership Council. As a NATO partner, Finland had 100 troops in Afghanistan as of September 2007.

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Finland is well represented in the UN civil service in proportion to its population and belongs to several of its specialized and related agencies. Finnish troops have participated in UN peacekeeping activities since 1956, and the Finns continue to be one of the largest per capita contributors of peacekeepers in the world. Finland is an active participant in the Organization for Security and Cooperation in Europe (OSCE) and in early 1995 assumed the co-chairmanship of the OSCE's Minsk Group on the Nagorno-Karabakh conflict.

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Cooperation with the other Scandinavian countries also is important to Finland, and it has been a member of the Nordic Council since 1955. Under the council's auspices, the Nordic countries have created a common labor market and have abolished immigration controls among themselves. The council also serves to coordinate social and cultural policies of the participating countries and has promoted increased cooperation in many fields.

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In addition to the organizations already mentioned, Finland became a member of the following organizations: Bank for International Settlements, 1930; International Monetary Fund, 1948; International Bank for Reconstruction and Development, 1948; General Agreement on Tariffs and Trade (GATT), 1950; International Finance Corporation, 1956; International Development Association, 1960; European Free Trade Association, 1961; Asian Development Bank, 1966; Organization for Economic Cooperation and Development, 1969; Inter-American Development Bank, 1977; African Development Bank, 1982; Multilateral Investment Guarantee Agency, 1988; the Council of Europe, 1989; European Bank for Reconstruction and Development in Central and Eastern Europe, 1991; World Trade Organization, 1995; and INTELSAT, 1999. Finland entered Stage Three of EMU (the European Monetary Union) in 1999. All the Nordic countries, including Finland, joined the Schengen area in March 2001.

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==Economy==

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[[File:Logs in Yyteri 2009.JPG|thumb|left|300px|Logs in Yyteri.]]

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Finland has an industrial economy based on abundant forest resources, capital investments, and high technology.

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The Finnish economy has made enormous strides since the severe recession of the early 1990s. Finland successfully joined the euro zone and has outperformed euro-area partners in terms of economic growth and public finance. In the last few years, the Finnish economy has performed reasonably well. Total output was 5% higher in 2006 than in 2005, but economic activity leveled off in the latter half of the year. GDP is predicted to grow by 4.4% in 2007, while 2008 is likely to show a slower rate of growth, estimated at 3.3%. Despite the current favorable outlook, there is a degree of uncertainty in the Finnish economy caused by the large fluctuations in electronics industry production, together with resource constraints. Cost and price pressures have increased, and there is a threat of industry’s price competitiveness starting to weaken.

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Unemployment decreased significantly from 1994 to 7.7% in 2006 and is expected to drop to 6.7% in 2007. A relatively inflexible labor market and high employer-paid social security taxes hamper growth in employment. Labor bottlenecks are becoming more common in certain sectors, and this will increasingly restrict growth in output in the future. The main constraint to medium-term economic growth will be the drop in the population of working age once the post-war baby boomers reach retirement age.

Exports of goods and services contribute 32% of Finland's GDP. Metals and engineering (including electronics) and timber (including pulp and paper) are Finland's main industries. The United States is Finland's third most important trading partner outside of Europe. With a 3.8% share of imports in 2006, the United States was Finland's seventh-largest supplier. The total value of U.S. exports to Finland in 2006 was $2.6 billion. Major exports from the United States to Finland continue to be machinery, telecommunications equipment and parts, aircraft and aircraft parts, computers, peripherals and software, electronic components, chemicals, medical equipment, and some agricultural products. The primary competition for American companies comes from Russia, Germany, Sweden, and China. The main export items from Finland to the United States are electronics, machinery, ships and boats, paper and paperboard, refined petroleum products, telecommunications equipment and parts. In 2006, the United States was Finland's fourth-largest customer after Germany (11.3%), Sweden (10.5%), and Russia (10.1%), with an export share of 6.5%, or $5 billion. However, trade is only part of the totality: the 10 biggest Finnish companies in the United States have a combined turnover that is three times the value of Finland's total exports to the United States. About 2.3% of the Finnish GDP comes from exports to the United States.

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Except for timber and several minerals, Finland depends on imported raw materials, energy, and some components for its manufactured products. Farms tend to be small, but farmers own sizable timber stands that are harvested for supplementary income in winter. The country's main agricultural products are dairy, meat, and grains. Finland's EU accession has accelerated the process of restructuring and downsizing of this sector.

The origins of the Finnish people are still a matter of conjecture, although many scholars argue that their original home was in what is now west-central [[Siberia]]. The Finns arrived in their present territory thousands of years ago, pushing the indigenous Lapps into the more remote northern regions. Finnish and Lappish--the language of Finland's small Lapp minority--both are Finno-Ugric languages and are in the Uralic rather than the Indo-European family.

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Finland's nearly 700-year association with the Kingdom of [[Sweden]] began in 1154 with the introduction of Christianity by Sweden's King Eric. During the ensuing centuries, Finland played an important role in the political life of the Swedish-Finnish realm, and Finnish soldiers often predominated in Swedish armies. Finns also formed a significant proportion of the first "Swedish" settlers in 17th-century America.

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Following Finland's incorporation into Sweden in the 12th century, Swedish became the dominant language, although Finnish recovered its predominance after a 19th-century resurgence of Finnish nationalism. Publication in 1835 of the Finnish national epic, The Kalevala--a collection of traditional myths and legends--first stirred the nationalism that later led to Finland's independence from Russia.

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In 1809, Finland was conquered by the armies of Czar Alexander I and thereafter remained an autonomous grand duchy connected with the Russian Empire until the end of 1917. On December 6, 1917, shortly after the Bolshevik Revolution in Russia, Finland declared its independence. In 1918, the country experienced a brief but bitter civil war that colored domestic politics for many years. During [[World War II]], Finland fought the [[Soviet Union]] twice--in the [[Winter War]] of 1939-40 and again in the [[Continuation War]] of 1941-44. This was followed by the [[Lapland War]] of 1944-45, when Finland fought against the Germans as they withdrew their forces from northern Finland.

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During the Continuation War (1941-1944) Finland was a co-belligerent with [[Germany]]. However, Finnish Jews were not persecuted. Of the approximately 500 Jewish refugees who arrived in Finland, eight were handed over to the Germans, for which Finland submitted an official apology in 2000.<ref>[http://www.uta.fi/~tuulikki.vuonokari/fin-1.html Jews in Finland During World War II]</ref> Also during the war, approximately 2,600 Soviet prisoners of war were exchanged for 2,100 Finnish prisoners of war from Germany. In 2003, the Simon Wiesenthal Center submitted an official request for a full-scale investigation by the Finnish authorities of the prisoner exchange. It was established there were about 70 Jews among the extradited prisoners but none was extradited as a result of ethnic background or religious belief.

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Treaties signed in 1947 and 1948 with the Soviet Union included obligations and restraints on Finland vis-a-vis the U.S.S.R. as well as territorial concessions by Finland; both have been abrogated by Finland since the 1991 dissolution of the Soviet Union.

The state capital is Helsinki and the principal exports are machines, electronics (for example cellphones) and forestry products. Finnish is the principal language spoken, a Finno-Ugric language. Like many nations that do international business, or have a strong tourist trade, many Finns speak English to facilitate communication with other countries. The second official language is Swedish, which has the same status as Finnish in the country. Finland is known as "the land of lakes".

Geography

Mäntyluoto, Pori.

The area of Finland is approximately 338 000 square kilometers, with a north-south axis of 890 kilometers. Most of the landscape is covered with lakes and forests. Finland is often called the "Land of Thousands of Lakes", which is true, because the number of lakes in the country exceeds 188 000, of which about 56 000 have an area of one hectare or more. In the sea there are more than 3 000 islands. Cultivated land and habitation only account for 17% of the land area, rest being mainly Norway spruce forests.

Work force (2.65 million; of which 2.44 million are employed): Public services--32.8%; industry--19%; commerce--15.6%; finance, insurance, and business services--13.8%; agriculture and forestry--4.7%; transport and communications--7.4%; construction--6.7%.

The great masters of Finnish literature include Mika Waltari, Väinö Linna, Johan Ludvig Runeberg. Finland is a bi-lingual country and has produced its literary heritage in both Finnish and Swedish. The beloved Moomintrolls were created by the writer and graphic artist Tove Jansson.

Another important facet of traditional Finnish culture is the love of the Finnish sauna.

Northern Finland is home to a culture called the Sami people, or Laplanders, which are known for wearing red clothing and herding reindeer. Santa Claus is based on this culture.

Population

Finland currently numbers 5,302,778 inhabitants and has an average population density of 17 inhabitants per square kilometer. This makes it, after Norway and Iceland, the most sparsely populated country in Europe. Finland's population has always been concentrated in the southern parts of the country, a phenomenon even more pronounced after 20th century urbanization.

The share of foreign citizens in Finland is 2.5 percent being among the lowest of the European Union countries. Most of them are from Russia, Estonia and Sweden.

Religion

Helsinki, Lutheran Cathedral.

Most Finns are members of the Evangelical Lutheran Church of Finland (81.7 percent). With approximately 4.6 million members, the Evangelical Lutheran Church of Finland is one of the largest Lutheran churches in the world. A minority belong to the Finnish Orthodox Church (1.1 percent; see Eastern Orthodox Church). Other Protestantism denominations and the Roman Catholic Church in Finland are significant.

The main Lutheran and Orthodox churches are constitutional national churches of Finland with special roles such as in state ceremonies and schools. A university degree in theology is compulsory for Lutheran priests. Representatives at Lutheran Church assemblies are selected in church elections every four years.

Even though the membership in main Lutheran church is high, the population is not highly religious. Polls suggest that 28-60% of the population to be either agnostics or atheists. [2]

Government

President and cabinet

Elected for a 6-year term, the president:

Handles foreign policy, except for certain international agreements and decisions of peace or war, which must be submitted to parliament, and EU relations, which are handled by the prime minister;

Is commander in chief of the armed forces and has wide decree and appointive powers;

Appoints the prime minister and the rest of the cabinet (Council of State). The Council of State is made up of the prime minister and ministers for the various departments of the central government as well as an ex officio member, the Chancellor of Justice. Ministers are not obliged to be members of the Eduskunta and need not be formally identified with any political party.

The president may, upon proposal of the prime minister and after having heard the parliamentary groups, order parliament to be dissolved, and a new election held.

Parliament

Constitutionally, the 200-member, unicameral Eduskunta is the supreme authority in Finland. It may alter the constitution, bring about the resignation of the Council of State, and override presidential vetoes; its acts are not subject to judicial review. Legislation may be initiated by the president, the Council of State, or one of the Eduskunta members.

The Eduskunta is elected on the basis of proportional representation. All persons 18 or older, except military personnel on active duty and a few high judicial officials, are eligible for election. The regular parliamentary term is 4 years; however, the president may dissolve the Eduskunta and order new elections at the request of the prime minister and after consulting the speaker of parliament.

Judicial system

The judicial system is divided between courts with regular civil and criminal jurisdiction and special courts, with responsibility for litigation between the public and the administrative organs of the state. Finnish law is codified. Although there is no writ of habeas corpus or bail, the maximum period of pretrial detention has been reduced to 4 days. The Finnish court system consists of local courts, regional appellate courts, a Supreme Court, and a Supreme Administrative Court.

Administrative divisions

Gulf of Finland.

Finland consists of five provinces and the self-ruled province of the Aland Islands. Below the provincial level, the country is divided into cities, townships, and communes administered by municipal and communal councils elected by proportional representation once every 4 years. At the provincial level, the five mainland provinces are administered by provincial boards composed of civil servants, each headed by a governor. The boards are responsible to the Ministry of the Interior and play a supervisory and coordinating role within the provinces.

The island province of Aland is located near the 60th parallel between Sweden and Finland. It enjoys local autonomy and demilitarized status by virtue of an international convention of 1921, implemented most recently by the Act on Aland Self-Government of 1951. The islands are further distinguished by the fact that they are entirely Swedish-speaking. Government is vested in the provincial council, which consists of 30 delegates elected directly by Aland's citizens.

Military

Finland's defense forces consist of 35,000 persons in uniform (26,000 army; 5,000 navy; and 4,000 air force). The country's defense budget equals about 1.3% of GDP. There is universal male conscription under which all men serve from six to 12 months. As of 1995, women were permitted to serve as volunteers. A reserve force ensures that Finland can field 490,000 trained military personnel in case of need.

Political parties

Finland's proportional representation system encourages a multitude of political parties and has resulted in many coalition governments. Political activity by communists was legalized in 1944, and although four major parties have dominated the postwar political arena, none now has a majority position. In elections held in 2007, the Center Party (Keskusta), traditionally representing rural interests, kept its position as the biggest party. The then-opposition Conservative Party, however, came away as the biggest winner, gaining 10 seats and becoming the second-largest political party in the country. The Center then formed a four-party governing coalition with the Conservatives and the Swedish People's Party and the Greens. The Social Democratic Party (SDP) suffered a defeat in these elections and fell to the third position among the big parties. Of the other parties, the True Finns, the Green League, and the Swedish People’s Party were able to gain seats in parliament. The Conservative Party received the portfolios of foreign minister, finance minister, and defense minister, among others, and became an important player after a long interval.

Principal Government Officials

President--Sauli Niinistö

Prime Minister--Jyrki Katainen

Foreign Minister--Alexander Stubb

Ambassador to the United States--Pekka Lintu

Ambassador to the United Nations--Kirsti Lintonen

Foreign Relations

Finland's basic foreign policy goal from the end of the Continuation War with the U.S.S.R. in 1944 until 1991 was to avoid great-power conflicts and to build mutual confidence with the Soviet Union. Although the country was culturally, socially, and politically Western, Finns realized they must live in peace with the U.S.S.R. and take no action that might be interpreted as a security threat. The dissolution of the Soviet Union in 1991 opened up dramatic new possibilities for Finland and has resulted in the Finns actively seeking greater participation in Western political and economic structures. Finland joined the European Union in 1995.

Previous relations with the Soviet Union, and today with Russia

The Uspenski cathedral of Helsinki; with its golden cumpolas and redbrick façade, the cathedral is one of the clearest symbol of the Russian impact on Finnish history.

The principal architect of the post-1944 foreign policy of neutrality was J.K. Paasikivi, who was President from 1946 to 1956. Urho Kekkonen, President from 1956 until 1981, further developed this policy, stressing that Finland should be an active rather than a passive neutral. This policy is now popularly known as the "Paasikivi-Kekkonen Line."

Finland and the U.S.S.R. signed a peace treaty at Paris in February 1947 limiting the size of Finland's defense forces and providing for the cession to the Soviet Union of the Petsamo area on the Arctic coast, the Karelian Isthmus in southeastern Finland, and other territory along the former eastern border. Another provision, terminated in 1956, leased the Porkkala area near Helsinki to the U.S.S.R. for use as a naval base and gave free access to this area across Finnish territory.

The 1947 treaty also called for Finland to pay to the Soviet Union reparations of 300 million gold dollars (amounting to an estimated $570 million in 1952, the year the payments ended). Although an ally of the Soviet Union in World War II, the United States was not a signatory to this treaty because it had not been at war with Finland.

In April 1948, Finland signed an Agreement of Friendship, Cooperation, and Mutual Assistance with the Soviet Union. Under this mutual assistance pact, Finland was obligated--with the aid of the Soviet Union, if necessary--to resist armed attacks by Germany or its allies against Finland or against the U.S.S.R. through Finland. At the same time, the agreement recognized Finland's desire to remain outside great-power conflicts. This agreement was renewed for 20 years in 1955, in 1970, and again in 1983 to the year 2003, although the subsequent dissolution of the Soviet Union led to the agreement's abrogation.

The Finns responded cautiously in 1990-91 to the decline of Soviet power and the U.S.S.R.'s subsequent dissolution. They unilaterally abrogated restrictions imposed by the 1947 and 1948 treaties, joined in voicing Nordic concern over the coup against Soviet leader Mikhail Gorbachev, and gave increasing unofficial encouragement to Baltic independence.

At the same time, by replacing the Soviet-Finnish mutual assistance pact with treaties on general cooperation and trade, Finns put themselves on an equal footing while retaining a friendly bilateral relationship. Finland now is boosting cross-border commercial ties and touting its potential as a commercial gateway to Russia. It has reassured Russia that it will not raise claims for Finnish territory seized by the U.S.S.R. and continues to reaffirm the importance of good bilateral relations.

Multilateral Relations

Finnish foreign policy emphasizes its participation in multilateral organizations. Finland joined the United Nations in 1955 and the EU in 1995. As noted, the country also is a member of the North Atlantic Treaty Organization's (NATO) Partnership for Peace as well as a member in the Euro-Atlantic Partnership Council. As a NATO partner, Finland had 100 troops in Afghanistan as of September 2007.

Finland is well represented in the UN civil service in proportion to its population and belongs to several of its specialized and related agencies. Finnish troops have participated in UN peacekeeping activities since 1956, and the Finns continue to be one of the largest per capita contributors of peacekeepers in the world. Finland is an active participant in the Organization for Security and Cooperation in Europe (OSCE) and in early 1995 assumed the co-chairmanship of the OSCE's Minsk Group on the Nagorno-Karabakh conflict.

Cooperation with the other Scandinavian countries also is important to Finland, and it has been a member of the Nordic Council since 1955. Under the council's auspices, the Nordic countries have created a common labor market and have abolished immigration controls among themselves. The council also serves to coordinate social and cultural policies of the participating countries and has promoted increased cooperation in many fields.

In addition to the organizations already mentioned, Finland became a member of the following organizations: Bank for International Settlements, 1930; International Monetary Fund, 1948; International Bank for Reconstruction and Development, 1948; General Agreement on Tariffs and Trade (GATT), 1950; International Finance Corporation, 1956; International Development Association, 1960; European Free Trade Association, 1961; Asian Development Bank, 1966; Organization for Economic Cooperation and Development, 1969; Inter-American Development Bank, 1977; African Development Bank, 1982; Multilateral Investment Guarantee Agency, 1988; the Council of Europe, 1989; European Bank for Reconstruction and Development in Central and Eastern Europe, 1991; World Trade Organization, 1995; and INTELSAT, 1999. Finland entered Stage Three of EMU (the European Monetary Union) in 1999. All the Nordic countries, including Finland, joined the Schengen area in March 2001.

Economy

Logs in Yyteri.

Finland has an industrial economy based on abundant forest resources, capital investments, and high technology.

The Finnish economy has made enormous strides since the severe recession of the early 1990s. Finland successfully joined the euro zone and has outperformed euro-area partners in terms of economic growth and public finance. In the last few years, the Finnish economy has performed reasonably well. Total output was 5% higher in 2006 than in 2005, but economic activity leveled off in the latter half of the year. GDP is predicted to grow by 4.4% in 2007, while 2008 is likely to show a slower rate of growth, estimated at 3.3%. Despite the current favorable outlook, there is a degree of uncertainty in the Finnish economy caused by the large fluctuations in electronics industry production, together with resource constraints. Cost and price pressures have increased, and there is a threat of industry’s price competitiveness starting to weaken.

Unemployment decreased significantly from 1994 to 7.7% in 2006 and is expected to drop to 6.7% in 2007. A relatively inflexible labor market and high employer-paid social security taxes hamper growth in employment. Labor bottlenecks are becoming more common in certain sectors, and this will increasingly restrict growth in output in the future. The main constraint to medium-term economic growth will be the drop in the population of working age once the post-war baby boomers reach retirement age.

The headquarters of Nokia Corporation in Keilaniemi, Espoo, 2005.

Exports of goods and services contribute 32% of Finland's GDP. Metals and engineering (including electronics) and timber (including pulp and paper) are Finland's main industries. The United States is Finland's third most important trading partner outside of Europe. With a 3.8% share of imports in 2006, the United States was Finland's seventh-largest supplier. The total value of U.S. exports to Finland in 2006 was $2.6 billion. Major exports from the United States to Finland continue to be machinery, telecommunications equipment and parts, aircraft and aircraft parts, computers, peripherals and software, electronic components, chemicals, medical equipment, and some agricultural products. The primary competition for American companies comes from Russia, Germany, Sweden, and China. The main export items from Finland to the United States are electronics, machinery, ships and boats, paper and paperboard, refined petroleum products, telecommunications equipment and parts. In 2006, the United States was Finland's fourth-largest customer after Germany (11.3%), Sweden (10.5%), and Russia (10.1%), with an export share of 6.5%, or $5 billion. However, trade is only part of the totality: the 10 biggest Finnish companies in the United States have a combined turnover that is three times the value of Finland's total exports to the United States. About 2.3% of the Finnish GDP comes from exports to the United States.

Except for timber and several minerals, Finland depends on imported raw materials, energy, and some components for its manufactured products. Farms tend to be small, but farmers own sizable timber stands that are harvested for supplementary income in winter. The country's main agricultural products are dairy, meat, and grains. Finland's EU accession has accelerated the process of restructuring and downsizing of this sector.

History

Johan Ludvig Runeberg statue.

The origins of the Finnish people are still a matter of conjecture, although many scholars argue that their original home was in what is now west-central Siberia. The Finns arrived in their present territory thousands of years ago, pushing the indigenous Lapps into the more remote northern regions. Finnish and Lappish--the language of Finland's small Lapp minority--both are Finno-Ugric languages and are in the Uralic rather than the Indo-European family.

Finland's nearly 700-year association with the Kingdom of Sweden began in 1154 with the introduction of Christianity by Sweden's King Eric. During the ensuing centuries, Finland played an important role in the political life of the Swedish-Finnish realm, and Finnish soldiers often predominated in Swedish armies. Finns also formed a significant proportion of the first "Swedish" settlers in 17th-century America.

Following Finland's incorporation into Sweden in the 12th century, Swedish became the dominant language, although Finnish recovered its predominance after a 19th-century resurgence of Finnish nationalism. Publication in 1835 of the Finnish national epic, The Kalevala--a collection of traditional myths and legends--first stirred the nationalism that later led to Finland's independence from Russia.

In 1809, Finland was conquered by the armies of Czar Alexander I and thereafter remained an autonomous grand duchy connected with the Russian Empire until the end of 1917. On December 6, 1917, shortly after the Bolshevik Revolution in Russia, Finland declared its independence. In 1918, the country experienced a brief but bitter civil war that colored domestic politics for many years. During World War II, Finland fought the Soviet Union twice--in the Winter War of 1939-40 and again in the Continuation War of 1941-44. This was followed by the Lapland War of 1944-45, when Finland fought against the Germans as they withdrew their forces from northern Finland.

During the Continuation War (1941-1944) Finland was a co-belligerent with Germany. However, Finnish Jews were not persecuted. Of the approximately 500 Jewish refugees who arrived in Finland, eight were handed over to the Germans, for which Finland submitted an official apology in 2000.[3] Also during the war, approximately 2,600 Soviet prisoners of war were exchanged for 2,100 Finnish prisoners of war from Germany. In 2003, the Simon Wiesenthal Center submitted an official request for a full-scale investigation by the Finnish authorities of the prisoner exchange. It was established there were about 70 Jews among the extradited prisoners but none was extradited as a result of ethnic background or religious belief.

Treaties signed in 1947 and 1948 with the Soviet Union included obligations and restraints on Finland vis-a-vis the U.S.S.R. as well as territorial concessions by Finland; both have been abrogated by Finland since the 1991 dissolution of the Soviet Union.

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